San Diego’s Software Equity Group Sees Software M&A Deals Ramping Up in 2011

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The way some people talk, the annual report from the Software Equity Group is the software industry’s equivalent to “The Baseball Abstract,” the wildly popular report on hitting, pitching, and fielding statistics that Bill James began publishing in Kansas 34 years ago.

“Nobody else comes close to capturing the trends and transactions in the software industry that they have,” says Jeb Spencer, a co-founder and managing partner at TVC Capital, a small private equity firm in San Diego that invests only in software companies. It’s also surprising to many, Spencer says, that the best and most thorough analysis of the software industry’s transaction activity is put together by a boutique investment banking firm in San Diego.

But it’s certainly being read carefully at the higher levels of software companies, buyout firms, and elsewhere. The 2010 Software Industry Equity Report provides data, insights, analysis, and other information about software mergers & acquisitions, public software developers’ financial and stock market performance, software industry market trends, initial public offerings, and venture capital investments. It also includes the Software Equity Group’s 2011 “Buyer Survey,” which offers insights into the acquisition strategies at the largest software companies in the world.

JMI Equity managing partner Paul Barber tells me the report is an excellent resource to benchmark a software company’s performance against their peer group. And Mission Ventures managing partner Leo Spiegel says the annual report fills a gap in terms of providing in-depth industry research that is no longer available from many major financial institutions, which have cut back on equity analysts who make “buy” and “sell” recommendations on certain companies as a service to investment clients.

They are hardly alone. The Software Equity Group says it has sent copies of its 2010 Software Industry Equity Report to 20,000 subscribers in 64 countries. Customers, who are willing to pay $595 a copy, include software industry executives, venture capitalists, private equity investors, and other investment banks.

The latest report predicts that software mergers and acquisitions will ramp up significantly this year, after M&A deals increased … Next Page »

Bruce V. Bigelow is the editor of Xconomy San Diego. You can e-mail him at bbigelow@xconomy.com or call (619) 669-8788 Follow @bvbigelow